Cf Industries Holdings, Inc. · NYSE:CF
Cf Industries — Q2 2019 Earnings Presentation
15 slides from Cf Industries's earnings presentation, Jul 31, 2019
Slide 1: Safe harbor statement
Safe harbor statement All statements in this communication by CF Industries Holdings, Inc. (together with its subsidiaries, the “Company”), other than those relating to historical facts, are forward-looking statements. Forward-looking statements can generally be identified by their use of terms such
Slide 2: Note regarding non-GAAP financial measures
Note regarding non-GAAP financial measures The company reports its financial results in accordance with U.S. generally accepted accounting principles (GAAP). Management believes that EBITDA, adjusted EBITDA, free cash flow, and free cash flow yield, which are non-GAAP financial measures, provide add
Slide 3: Financial results - second quarter and first half 2019
Financial results - second quarter and first half 2019 (5) 1 (8) (1) natural gas derivatives (1) (3) (4) Depreciation and amortization was $252 million and $440 million for the three and six months ended June 30, 2019, respectively, and $241 million and $434 million for the three and six months ende
Slide 4: CF generated the highest free cash flow in the industry
CF generated the highest free cash flow in the industry Cash from operations CF Nutrien Yara (millions) Market Cap(1) (millions) Free c USD in millions 1,000 800 600 400 217 200 - (200) (400) (1)Market capitalization is calculated as shares outstanding as of the end of each respective period multipl
Slide 5: CF offers investors industry best free cash flow yield
CF offers investors industry best free cash 2 to 3 times greater than other industry participants flow yield FCF Yield(1) EV/Adj. EBITDA(2)(3) 10% 14 12 8% 10 6% 8 6 4% 4 2% 2 0% 0 -2% Source: Capital IQ July 30, 2019 (1)Represents LTM free cash flow divided by market value of equity (market cap) as
Slide 6: Global market overview
Global market overview • Nitrogen industry fundamentals expected to be positive in both the near and longer term Global demand growth for nitrogen over the next four years expected to outpace net capacity additions given the limited number of facilities currently under construction around the world
Slide 7: $2.7 billion of capital invested to grow, returned to shareholders, and reduce debt
In the last 24 months, $2.7 billion of capital was invested to grow, returned to shareholders, and to reduce debt • CF paid $388 million to acquire all publicly traded common units of Terra Nitrogen Company, L.P. in April 2018 • • $553 million paid through quarterly dividends $678 million returned t
Slide 8: Capacity growth coupled with share repurchases drive nitrogen accretion per share
Capacity growth coupled with share repurchases continue to drive nitrogen accretion per share CF Industries’ Nitrogen Volumes and Shares Outstanding as of Quarter-end 2009 – Q2 2019 Nitrogen per share CAGR: 14.1% Million shares Outstanding (6) Annual Nitrogen Equivalent Tons per 1,000 Shares Outstan
Slide 9: Appendix
DEF loading at Donaldsonville Appendix 11
Slide 10: CF production cost remains advantaged due to energy cost differentials
CF production cost remains differentials Global Energy Price 2016-2019F USD/MMBtu advantaged due to energy cost Energy Cost per ton of Ammonia* 2016-2019F USD/ton 400 16 14 350 12 300 10 250 8 200 6 150 4 100 2 0 50 2016 2017 2018 2019 2016 2017 2018 2019 North American production advantage per ton
Slide 11: Capital Allocation
Capital Allocation • Pursue growth within our strategic fairway, where returns exceed the risk-adjusted cost of capital Consistently return excess cash to shareholders in a timely fashion through dividends and share repurchases • • Under the previously announced $1 billion share repurchase program a
Slide 12: Balanced Approach to Capital Allocation
Balanced Approach to Capital Allocation 114.4 110.2 99.2 99.2 99.2 90.4 52.0 15.3 2012 2013 2014 2015 2016 2017 2018 2019 Diluted Weighted-Avg Shares Outstanding (in millions) 323.5 296.0 256.7 236.1 233.1 233.9 233.8 223.4 Source: Factset, Company filings. (1) Includes the effect of approximately 4
Slide 13: Non-GAAP: reconciliation of Net Earnings to EBITDA and Adjusted EBITDA
Non-GAAP: reconciliation of Net Earnings to EBITDA and Adjusted EBITDA (138) (92) (152) interests (13) 61 (4) derivatives (5) 2 5 intercompany loans(2) (1) (2) Loan fee amortization is included in both interest expense – net and depreciation and amortization. (Gain) loss on foreign currency transact
Slide 14: Non-GAAP: reconciliation of LTM cash from operations to free cash flow and yield
operations(1) Non-GAAP: reconciliation of LTM cash from to free cash flow and free cash flow yield (1)LTM cash provided by operating activities (cash from operations) for CF, Nutrien, and Yara is 12-month period ending June 30, 2019 and LTM cash from operations for OCI and Mosaic is the 12-month per
Slide 15: Non-GAAP: reconciliation of LTM cash from operations to free cash flow and yield
Non-GAAP: reconciliation of LTM cash from operations“) to free cash flow and free cash flow yield In millions, except percentage: an ‘share price, and ratios Cash provided by operating activities 1,592 2,448 1,305 Capital expenditures (431) (1,503) a i) eo) 0) (1,045) Noncontrolling interests (166)
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